Eric Holder releases 9 secret documents from Bush administration

[classicman]

Analysis: Obama recovery plans sowing some unease

WASHINGTON (AP) — President Barack Obama offered his domestic-policy proposals as a "break from a troubled past." But the economic outlook now is more troubled than it was even in January, despite Obama's bold rhetoric and commitment of more trillions of dollars.

And while his personal popularity remains high, some economists and lawmakers are beginning to question whether Obama's agenda of increased government activism is helping, or hurting, by sowing uncertainty among businesses, investors and consumers that could prolong the recession.

Although the administration likes to say it "inherited" the recession and trillion-dollar deficits, the economic wreckage has worsened on Obama's still-young watch.

Every day, the economy is becoming more and more an Obama economy.

More than 4 million jobs have been lost since the recession began in December 2007 — roughly half in the past three months.

Stocks have tumbled to levels not seen since 1997. They are down more than 50 percent from their 2007 highs and 20 percent since Obama's inauguration.

The president's suggestion that it was a good time for investors with "a long-term perspective" to buy stocks may have been intended to help lift battered markets. But a big sell-off followed.

Presidents usually don't talk about the stock market. But the dynamics are different now.

A higher percentage of people have more direct exposure to stocks — including through 401(k) and other retirement plans — than ever.

So a tumbling stock market is adding to the national angst as households see the value of their investments and homes plunge as job losses keep rising.

Some once mighty companies such as General Motors and Citigroup are little more than penny stocks.

Many health care stocks are down because of fears of new government restrictions and mandates as part a health care overhaul. Private student loan providers were pounded because of the increased government lending role proposed by Obama. Industries that use oil and other carbon-based fuels are being shunned, apparently in part because of Obama's proposal for fees on greenhouse-gas polluters.

Makers of heavy road-building and other construction equipment have taken a hit, partly because of expectations of fewer public works jobs here and globally than first anticipated.

"We've got a lot of scared investors and business people. I think the uncertainty is a real killer here," said Chris Edwards, director of fiscal policy for the libertarian Cato Institute.

Some Democrats, worried over where Obama is headed, are suggesting he has yet to match his call for "bold action and big ideas" with deeds.

In particular, they point to bumpy efforts to fix the financial system under Treasury Secretary Timothy Geithner.

Obama may have contributed to the national anxiety by first warning of "catastrophe" if his stimulus plan was not passed and in setting high expectations for Geithner. Instead, Geithner's public performance has been halting and he's been challenged by lawmakers of both parties.

Republicans and even some top Democrats, including Rep. Charles Rangel, D-N.Y., chairman of the House Ways and Means Committee, have questioned the wisdom of Obama's proposal to limit tax deductions for higher-income people on mortgage interest and charitable contributions.

Charities have strongly protested, saying times already are tough enough for them. The administration suggests it might back off that one.

Even White House claims that its policies will "create" or "save" 3.5 million jobs have been questioned by Democratic supporters.

"You created a situation where you cannot be wrong," the chairman of the Senate Finance Committee, Montana Democrat Max Baucus, told Geithner last week.

"If the economy loses 2 million jobs over the next few years, you can say yes, but it would've lost 5.5 million jobs. If we create a million jobs, you can say, well, it would have lost 2.5 million jobs," Baucus said. "You've given yourself complete leverage where you cannot be wrong, because you can take any scenario and make yourself look correct."

Republicans assert that Obama's proposals, including the "cap and trade" fees on polluters to combat global warming, would raise taxes during a recession that could touch everyone. "Herbert Hoover tried it, and we all know where that led," says House Republican leader John Boehner of Ohio.

The administration argues its tax increases for the households earning over $250,000 a year and fees on carbon polluters contained in its budget won't kick in until 2011-2012, when it forecasts the economy will have fully recovered.

But even those assumptions are challenged as too rosy by many private forecasters and some Democratic lawmakers.

Many deficit hawks also worry that the trillions of federal dollars being doled out by the administration, Congress and the Federal Reserve could sow the seeds of inflation down the road, whether the measures succeed in taming the recession or not. The money includes Obama's $3.6 trillion budget and the $837 billion stimulus package he signed last month.

Polls show that Obama's personal approval ratings, generally holding in the high 60s, remain greater than support for his specific policies.

"He still has a fair amount of political capital, so the public is willing to cut him some slack and go along with him for a while," said pollster Andrew Kohut, director of the Pew Research Center. "But the public will have to get some sense that the kinds of things he's proposing are going to work, or are showing some signs that they are working."

Allan Sinai, chief global economist for Decision Economics, a Boston-area consulting firm, said the complexity and enormity of the crisis make it hard to solve.

"There's no way to get it all right, regardless of which president is making policy," Sinai said. "The problem is the sickness got too far. The actions taken, medicine applied, were mainly the wrong actions. So it's just worse, and it gets harder to deal with. At this stage, there is no easy answer, no easy way out. It's a question of how we fumble through."

Originally Posted by classicman

Analysis: Obama recovery plans sowing some unease

I dont question that there is some unease, including among some Democrats in Congress and among some economists who generally are supportive of the stimulus plan.

What I questioned was the bold statement about Obama's economic growth projections of 3-4% over the next few years as being:

Originally Posted by classicman

.....contrary to what virtually every economist says

The Fed agrees with those projections as does the NABE and to a lesser extent, the CBO.

In other words, the statement is virtual bullshit.

[sugarpop]

Originally Posted by classicman

Analysis: Obama recovery plans sowing some unease

Good grief! No matter WHO was in office right now, the economy would still be plunging. I have been saying for the past two years we were in a recession, but almost everyone I know (especially those on the right) ridculed me and said I didn't know anything about economics. And this is not an ordinary recession. Obama said from the very beginning, even before he was elected, that it was going to get worse before it gets better. He only just passed the stimulus, and it HAS already saved some jobs and even created a few. He has a housing plan. He has a plan for the financial institutions. Still, this will not magically work overnight. What do you expect, him to wave a magic wand and POOF everything is back to normal?

How quickly some forget the "unease" among many economists and even some Republican members of Congress at the time of the long term fiscal impact of nearly $2 trillion Bush '01 and '03 tax cuts

[TheMercenary]

Originally Posted by Redux

How quickly some forget the "unease" among many economists and even some Republican members of Congress at the time of the long term fiscal impact of nearly $2 trillion Bush '01 and '03 tax cuts

Chump chain these days..

[TGRR]

Originally Posted by TheMercenary

Chump chain these days..

Chump what?

[sugarpop]

Analysis: Obama recovery plans sowing some unease

"...Allan Sinai, chief global economist for Decision Economics, a Boston-area consulting firm, said the complexity and enormity of the crisis make it hard to solve.

"There's no way to get it all right, regardless of which president is making policy," Sinai said. "The problem is the sickness got too far. The actions taken, medicine applied, were mainly the wrong actions. So it's just worse, and it gets harder to deal with. At this stage, there is no easy answer, no easy way out. It's a question of how we fumble through."

You should have bolded that.

I don't think all the naysayers are helping either. This recession, which is possibly a depression now, or headed that way, is different. The housing market started it, but it was created by the financial institutions, and the problems that created this mess are not going to be easy to solve. They run deep and they are convoluted. It is complicated. I don't think ANYONE knows exactly what to do. It's easy to sit on the sidelines and criticize, but if asked what they would do, many of the people being critical don't have a clue what would work either. *heavy sigh*

One thing is for sure, doing nothing, or simply cutting taxes, is NOT the answer. And that is what many republicans want to do. Cut taxes. A LOT of wealth was artificially created, and that needs to adjust. It will never come back, because it was never real to begin with.

[tw]

Reposted by classicman:

President Barack Obama offered his domestic-policy proposals as a "break from a troubled past." But the economic outlook now is more troubled than it was even in January, despite Obama's bold rhetoric and commitment of more trillions of dollars.

Obama also said we will be paying for the damage created this last decade even 10 years from now. From mainsteam economists in San Francisco who learned by studying fourteen previous severe recessions: a GDP drop of 9% which takes two years to reach bottom. Unemployment averages 7% and keeps dropping for five years. Housing prices take five years to drop 36%. Government debt rises 86%. Scary part is that America has already surpassed some of these averaging numbers. However statistical variations for 'average' GDP and unemployment numbers are large.

Lessons from history when another administration was so irresponsible. Richard Nixon's total contempt for the American economy in 1968 and 1970 even created stagflation in 1975 through 1979. So what did George Jr create in 2000 through 2008? We are now seeing the result. Economics is taking revenge.

Deja vue? Facts don't change no matter how many political agendas attack Obama.

Obama is encouraged to talk up the economy. But he has already admitted a truth. We will be paying for this economic mismanagement for 10 years. How accurate were the mainstream economists? Those are the numbers. Now we will learn – with or without cheap shots at Obama. Responsible attacks for our economic malaise are directed at the nation’s worst president in 100 years (according to presidential historians) – George Jr.

[TheMercenary]

Chump Change